I Cosigned 2 Cars For My Mom And Now They're Repossessed

27:37Right. When's the lease up? Or he could take the payments over. He could. When is it up? I have to look. I'm not sure. I think it's another year. Is he working? He just started a job. He just started an internship. So yes. Okay. So I would have that conversation. I'd say, son, I made a mistake and I'm really sorry. I, cause it's going to affect both of us. I agreed to pay this lease. I can't afford it. I'm over here struggling. This lease is good for one more year. We either need to, you either need to take this on completely. If you can't afford it, I'll pay whatever little bitty portion that you can't afford to pay.

28:15But this is going to, and put it in George's words, if I don't fix myself now, I will end up being a burden to you later on in a greater way. And I don't want that. And hopefully he can understand that. But yeah, the tables, the way we've been doing life with money and kids has to change today. And I'm glad that you called in because I think that you're starting to understand that. But I can't stress that these are not going to be, they're easy to understand, not easy to do. Right. You know? Yes. So here's the math on this. If you say, you said you make about$7 ,500 a month if you keep the side job, right?

28:53Yes. Are you doing any investing right now? No, a little bit to my 401k, but I stopped that. Good. Let's pause all investing to clean this mess up so that we can actually retire one day. That's the goal. And right now investing is not helping us get rid of the mess. So let's say you could, you know, you make 7 ,500 and you lived on 4 ,000. That's fair. If you move this, if you switch your renting situation, that frees up 3 ,500 bucks a month to throw a debt, right? With 130 grand in debt, you're done in about 37 months, three years. Right. And that's if you do no other changes. If you can just cut your rent down and throw that amount of the debt, we're done in three years.

29:31I think you can do even better with this. You're very talented. You have a lot of high-skilled – you have a lot of high skills. I would use that to your advantage. Live on as little as you can for two years. Let's say your 60th birthday. Let's celebrate you becoming debt-free. How cool would that be? That would be amazing, really amazing. It's possible. I mean you can crunch the numbers and go, all right, this is the margin I need. I need$4 ,000 a month come hell or high water to be throwing at this debt. And then do the debt snowball. Knock out the smallest balance first. For you, the IRS debt goes to the top.

30:01because they can really screw up your life and garnish your wages. So I would attack that first. But once you're done with that, just debt snowball it. Whatever the smallest card balance is, attack that first. Minimum payments on the rest. Okay. You can do this. Keep making my minimum payments. Yes. Don't get behind on anything if you can help it. Yeah, I'm already a little bit behind on a lot of the payments. Is anything in collections, credit card-wise? No, not one credit card is actually, yes. Okay, so go ahead and settle that one. Just try to get current on everything and then attack the IRS debt, then debt snowball the rest.

30:36That's your goal. So we're going to cover four walls, basic food, utilities, housing, transportation, insurance. And then beyond that, we are living like broke college kids. Because right now your kids are living more lavishly than you are. That's pretty wild. Like I think college kids should be broke. That's the stage of life. Not a 58-year-old woman who's trying to provide for them. So you have done more than enough. You don't need to earn your kids' love by going deeper and deeper into debt. Right. Okay. You got this, Lisa. We're cheering you on. Thank you so much. I'm going to gift you every dollar, a premium version, to connect your bank accounts, have all the transactions come through, because you make great money.

31:11It's time to put every dollar to work cleaning up this mess.

31:35Well, Dave, you know, on the show all the time, we get calls about cars, used cars. What's one thing you want folks to know? Well, really a couple of things. Number one is always buy used unless you've got a million dollars. We don't buy new cars. And if you're going to buy used, number two, you want it to last. And that means regular, proper maintenance. Yeah, that's a big deal. I know when Sam and I moved from South Florida up to Tennessee, that's the first thing you're looking for. You need somebody who can take care of your car. So when we found Christian Brothers Automotive, it was a no-brainer, and they've been absolutely great.

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33:03The Ramsey Show question of the day is sponsored by Y-Refi. If your private student loans are in default and other lenders said no, Y-Refi could be your next step. Y-Refi was built for this situation, helping borrowers refinance with a low fixed rate and an affordable payment so you can get back to winning with money. Check out Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. may not be available in all states. All righty. Today's question comes from Kyle in Florida. He says, I'm going to be a new dad soon and want to do everything I can to set my son up for success. We plan on opening a Trump account for him and contribute$5 ,000 a year.

33:39How can we avoid a mindset of entitlement in our son if this account has hundreds of thousands of dollars in it when he turns 18? We'd like to reinforce the idea that we did not set up this account to squander the money away on ridiculous material purchases every 18 year old dreams about? What's the best way to set up boundaries on how this money can be used? Well, it's a really great question. And there's kind of two sides of it, George. The first side I'm seeing is just raising a child in the way that he should go, right? Like there's what you're teaching him about money in the next 18 years is really huge.

34:16And then there's the side of, is this really the best option for you? Do you want to have control over that money or do you want him to receive this money at 18. So there's kind of the strategy side of how is it smart for him to receive that kind of money at 18. So let's talk about both. I'll kind of start with the raising side. I think whatever you show your kids the most is what they're going to pick up on, and they're going to learn. And so if you've created a lifestyle where we don't squander things in our home, and we're very thoughtful about our purchases, and we don't buy things to impress other people, your child is going to pick up on that.

34:55So a lot of that is due diligence on your part. Now, when it comes to the Trump accounts, you know, if you want to participate, I suppose you can. It's not what I do. I do 529s for my kids. And we also have a brokerage account that we know we're going to gift money to them out of when we're ready to help with things like down payments and things like that. So that's how we do it. What do you do, George? So I actually looked into this and I realized there's not a whole lot of advantages outside of the free thousand dollars if your child is born in 25 through 28. So I had a kid in 2025. I will happily take a thousand dollars from the government because I've given much more to them.

35:33Yeah, that's right. I'll take that free thousand for my little guy and it'll grow. I will not be contributing more than that. Because to your point, at 18, they get control if it's a Trump account. Yeah, and they don't need hundreds of thousands of dollars at age 18. And you hope they're going to go, I'm going to use this for a down payment or you don't. But you don't know. Yeah. And we don't know exactly how they're going to guard against you using it for other things. They haven't been super clear about what you can use it for outside of education and a down payment. That's actually a major difference that I want to talk about.

36:03You know, you look at things like Roth IRAs or custodial accounts or five. They're established like what it is is what it is with these Trump accounts because it's tied to it has the ability to change over time. It's not locked in and what it will be and what it can change into. And I think that's something worth noting. But yeah, I'm the type of parent. I want control. I don't want you ending up with$100 ,000 or$500 ,000 at age 18. I want to have the control. Because you remember us at 18. No 18-year-old, their prefrontal cortex isn't baked yet. I was an idiot. Yes, I was not it. These are the same kids taking out$250 ,000 for degrees that they don't need.

36:42That's right. That's right. Let's not give them that control. So I do exactly what Jade says. I got a 529 plan for education. I'm funding that. And then for other needs outside of education, I go with the taxable brokerage account in my name that I control. In my name. That's right. And then I can gift that money when I believe they are ready to handle it. That's right. And so if it's, I want to cover the wedding, great. I can take that money out and I can pay for the wedding. That's right. If it's their first car, I have control over that of what car I choose to buy for them. Yeah, that's right.

37:10And same thing with a down payment. If you want to gift them a house, I want to be able to control that. And so I think that's very wise to do. And I'm not mad at the Trump accounts. I just don't think it's all it's cracked up to be. But I love that it's starting the conversation about investing for your kids at an earlier age. It is. And you have up to$18 ,000 per parent, per child, per year that you can give without really any. Without having to fill out the gift tax. Exactly. Form. And so that's a great way to go as well. And the exemption is now if you're a married couple, it's like$30 million.

37:39It's high for a lifetime. Your gift, your estate exemption. So not something most people have to worry about hitting. So great question, Kyle. If you want to do this, I would contribute to the taxable brokerage account. And if your child can get the free$1 ,000, I would absolutely take that and let it ride. Because even$1 ,000 from zero to 60, don't even tell them it exists. I mean, they'll know it exists when they turn 18. And they're like, sweet, free money. Maybe that's for the first car. That's right. Perfect. All right. Let's go to Quentin in Lincoln, Nebraska. What's going on? Hey, guys.

38:12I appreciate y 'all taking my call. Sure. um so uh just to keep it short i have uh just found out that my girlfriend um who i've been planning to propose to is pregnant and um we're expecting twins whoa so yeah you know a blessing absolutely i uh but and concerned about i'm i'm on baby step two uh doing the death snowball um I'm financially concerned that, you know, with these two coming, that we're going to be in a bad spot if I continue to put everything into the debt snowball. I'm wondering if maybe I should put a little bit more into savings instead and what your guys' thoughts are on that.

38:56I mean, yes, I would probably pause all getting out of debt behavior because this is a storm and a stork. This is storm mode and stork mode. What's the plan going forward? Was this somebody that you were thinking could be the one or did this was this really just like, oh, yeah, this was a very big surprise. It's funny because for months I've been planning we're taking the trip to Florida next week and I have a ring. OK, so we're going to do. Yeah. So, you know, I wanted to do marriage and everything before kids and then come to find out. So we are. Well, the good news is this was someone that you were thinking about that you knew you wanted to spend your life with.

39:37It wasn't just like I was dating this girl and uh-oh and we knew she wasn't the one. Okay, so this is— So you're still going to propose next week? Yes, that's the plan. Good. All right. Okay, so it just kind of expedites things. If I was in your shoes, let's propose. Let's hope she says yes. I assume she will. And then let's get married. Let's do a courthouse wedding and then we'll do a big party to celebrate later. Because right now we're broke with a baby on the way. The party can wait. but I think it is wise if you were already planning on getting married let's go ahead and speed that process up because we we've been doing some some things backwards now as you said you didn't want it to happen in this order but here we are right so let's move forward with a pile of savings and when baby and mom babies and mom are home safe then we can hit play on the debt snowball and hopefully you don't have to touch that pile of money and you'll have a bunch to throw at those debts.

40:28What do you both do for work?

40:32I'm a union plumber and she works in a daycare right now, but she will be staying home when we have the kids. And that was kind of a second part of the question is, you know, with her being in debt and her staying home, marriage was obviously going to be an option. And as you guys are saying it, do it sooner than later. But then I'll be taking on her debts as well. And so that's where, you know. So it's going to take like a decade to pay this off if it's all on you? Well, I mean, it kind of feels like it. You know, I make decent money. What do you make and what's the total debts? I'm at$110 last year on my W-2s.

41:11And total debt combined is about$26,$27. Oh, great. Okay, we can do that. You can knock that out fast within a year. Maybe even less. Even with just your income. Right, and that's where. So I just downloaded every dollar, and it looked like I was going to get one of the big ones off right before a due date. Good. But then that's where I'm now. I'm like, I don't know if I should. Right, but knowing that you're stacking up that money and knowing that the day these babies come home and they're safe and they're healthy, knowing that you can take that money and then knock out that debt is fabulous.

41:49So it's just peace of mind sitting there waiting for you. are your expenses pretty low i need that now uh yeah i mean mortgage you know we're looking at 1400 and after that you know cars are paid off great um what about insurance and health insurance health insurance is all union so that comes out before my take home okay and do you know what the out-of-pocket max is or like what the deductible is because you're going to need that possibly I want to say it's a$5 ,000 deductible, but if we add her on, I'm not 100%. I haven't looked into that. I check into that. I always like to advise people to have that number saved up going in because, again, you never know what could happen.

42:30And it could be very easy in certain situations to hit that deductible and have to shell out that money or even worse, you know, out-of-pocket max for the year. But if your expenses are pretty low, you can throw$4 ,000 a month into savings. Seven months from now, you have all the money to pay off the debt, and as soon as they're home and healthy, throw it at the debt and we're debt-free, man. Best of luck.

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44:21Welcome back to the Ramsey Show and the Fairwinds Credit Union Studio. I'm George Camel, joined by Jade Warshaw, and we're taking your calls at 888-825-5225. Jason is with us in Indianapolis. What's going on, Jason? Hey, thanks for taking my call. So the most basic level of this question is for about a 10-year period, my wife and I need to live in separate cities. I'll be snowboarding and coming back seasonally. She'll come out to where I want to be as she's able. So the most basic, how do we pull this off? Why is it necessary? Tell us about what you're trying to accomplish. Sure. We're from the Indianapolis area.

45:04We spent about three years in Arizona during the COVID years. And when we moved back to Indianapolis for some elder care and family responsibilities, COVID has had a serious impact on my health. All the specialists I've been treating with, not very effective. What has worked for me is the climate back in Arizona. My conditions continue to worsen. And so I need to be out there for relief. My wife has a once in a lifetime career with a large Indianapolis employer and has a pension that we're really going to need come retirement. And the family reasons still exist for her. OK, so is how much is how much do you guys earn?

45:57um combined um we make about 160 and she does have some potential for bonus but we don't really think about that what makes her job a once in a lifetime opportunity because when when you said that i'm thinking that you're gonna hit me with the fact that she's making crazy money well um she's making crazy money for the way we grew up but she works for A big pharma here has a phenomenal job with her position was eliminated. They allowed her to come back as though she had no lost time and resume her pension where she left off. OK. Finding employers in this area with a pension. Not great. We're beyond the part about where I think she should go with me and we should have one home.

46:46That's a focus on the family discussion that we continue to have. When you say family, are we talking kids, like parents? Her father-in-law, I'm sorry, my father-in-law, her father has dementia. We're here to help her brother and his wife with elder care. And then there are children having babies. And so we've got grandchildren, too. And, you know, it's a difficult situation because the crux of this is my health. And it's not improving. and, you know, there's something to be said for I'm not living and contributing positively to the family dynamic until I get better. Where would the majority of the time be spent?

47:33Would you be, or let me ask this in a better way, would you be living in Arizona basically indefinitely and you're just making trips to Indianapolis to visit her where she's living in Indianapolis and then making trips to visit you? Like it's too, you're spending the majority of time in your separate cities, or is it kind of like we go over here, then we go over there? Right. So my employer, I work remotely and have the flexibility to be back in Indiana during the lowest migraine season, which would typically be the summer. So you'd only be there summer. Oh boy. Typically, yeah. She would come out to see me when she can.

48:12I would come back here when I can. And it doesn't preclude that I wouldn't come out other times, but in terms of the biggest amount of time, it would be summer times. And this would be for a 10-year period when she plans to fully retire. And the way I'm wired, I'll always have to work to keep my brain busy. Let me tell you what I'm thinking right here. And again, this is a decision you guys are going to make. But the two things that pop up to me is 10 years is a very, very long time. And a lot of times what I'm hearing here is several variables that are very important and that you're trying to hang on to every single variable, but they're not all serving you in the right way.

48:58Okay, there's the aging kids, or I'm sorry, the aging parents, there's the grandkids, there's the dream job, there's the health issue. So there's all these things. I really truly think that you're going to have to force rank the top two most important things and make the decisions around that. If everything is important, your marriage goes down the drain. I just don't see how you can do this financially because I would never hang on to a job simply for a pension. Number one, especially at the detriment of you having to spend 10 years like, you know, back and forth. Then there's the part of there's the elder care.

49:37But you said the it sounded like you said the sister-in-law and her husband were there. Siblings involved. And so why wouldn't we use our flights? Why wouldn't we? And this is just an option. I'm not saying you have to do this. Why wouldn't we everybody move to AZ or and she gets a job there in Arizona and then you take flights back to visit the grandkids or you take flights back to visit the aging parents. That feels more balanced than the solution that we that you're presenting. There may be more to it that I know nothing about. But I think the number one priorities here have to be you staying alive and healthy and you being keeping your marriage in a state where it can be healthy.

50:15And I think that has to go as painful as that is. I think that has to go above the aging parents and the dementia and the grandkids. Completely agree. That's been my preference all along. I'm up against some resistance and some different interpretations of rank and responsibility and forms of obedience. And so this is kind of the desperation throwdown of we've had this discussion multiple times and I'm finally at a point physically and mentally where I have to start making a decision about my health long term. And so that's that's the rest of the dynamic. OK, so you're just saying, yeah, I got to live.

51:03I'm going to do this. Hopefully there's a way we can work it out to where this works. Do you guys combine finances right now? Yes. Okay. So the answer to your question, just to make sure we at least hit that, is how do you afford it? You're going to need to find affordable housing in Arizona, and that might just mean renting for now. I don't know that I would go buy a house just for you. I would just rent affordably in the area. And then do you guys have a mortgage in Indianapolis currently? We do. The other piece to this is it's a larger house than we needed. We did get a good deal because of some family connections.

51:37So it's going to be a bigger asset at retirement, but we are taking in a renter that will help reduce the mortgage. And we've done that before sporadically. My intent was to start renting and then see later if I would end up in the condo that we would ultimately retire in. Because renting for 10 years doesn't seem to be terribly wise. What happens at the end of 10 years? Is that kind of the time where you think aging parents might not be part of the picture? What denotes 10 years? 10 years is when we're both 55. She plans to stay with this employer and retire at 65, and then we spend the rest of our life out there.

52:18Out there has been the plan all along at retirement. But it really is then now we're seeing where the real priority is. It really is with the job, not the aging and parents with dementia. Those are just other factors. Yeah, those were things to sell it. If you took the pension out of the picture, what would you do? Because I think you can get a great job in pharma making six figures. And you guys can build your own wealth over a decade instead of hanging on to all of this just for a pension while your marriage is down the drain. Yes. And so those are some real hard things to consider. I know your health is paramount.

52:50You got to take care of yourself. but I don't like the options that we have thus far.

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54:45Sarah is in Boston, Massachusetts. What's going on, Sarah? Hey, you guys. Thank you for taking my call. I really appreciate it. What's going on? Well, my question is, is it unwise for me to move out of my mom's home while paying off my debt? Ah, how old are you? Well, I'm 41. How long have you been living there? I've been back home since November of 2024. Okay. What happened that got you back into her house? My dad was sick and had passed away, so I wanted to go home and be able to be there for him while he was alive and be able to help where I could. And then he had passed away in February 2025.

55:32Oh, I'm so sorry. Thank you. Did you move your whole life there, like job and everything, kind of relocate? Yes, pretty much. I was in Colorado. I had an apartment. I had a full-time job. I was at a part-time job as well. I was doing okay. This happened. I just really felt led to come home. So I literally sold everything I could, get what I could in my car, and went back home to Massachusetts. How much debt do you have?

56:04Actually, it's about$52 ,000. What kind is that? Break it down for us. Yep. I have student loan debt. It's around$33 ,000. I have a vehicle that I own, and it's a little over$14 ,000. And then I have credit card debt around$4 ,000. Okay. And what do you make? Currently, I make, at my full time, I make about$70 ,000. And then I have a part-time job. roughly I don't know what I make anyway there it does change since part-time um so roughly I would say I take home about$4 ,500 a month between jobs$4 ,500 yeah okay so um you know if you were so it's been about a year since your loss how's your mom doing um she's doing okay it's a different situation.

57:05It's actually, they were actually divorced. They've been divorced for years. Okay. But she was where I came home. I couldn't stay with my stepmom and my dad. So I stayed with her. I see. I see. I see. But she's doing okay. But it is a different circumstance. Okay. So the purpose of you moving in with your mom was to be there for your dad. It didn't seem like the purpose of that was to pay off debt because you had the same debt when you were in Colorado with the apartment, yes? Yes. What caused you to not get ahead on the debt? Was it you just didn't have a mind to pay it off yet or you didn't have the margin?

57:42Do you mean when I was in Colorado? Uh-huh. When I was in Colorado, I just didn't have the margin. I mean, I just paid as best I could. Okay. But I just didn't have the margin. So do you think that if you moved out and got yourself in something nice, you know, a fine one-bedroom apartment somewhere around a thousand, you know, $1 ,100 a month, you would have the margin to do it at that point? I don't think I have the margin in this area. It's hard to even find a room sometimes. Are you in the city proper or are you in a suburb? I'm suburb. Okay, and do you work remotely or is it in person? In person.

58:21Okay, so I'm wondering, you know, how far of a commute could we handle to get somewhere that's a little less expensive? Can you tell me the area? I'm from that area. I'm just curious, what kind of area are we talking about where it's super expensive in the suburbs? Because it can range. Metro West. Okay. Metro West area. I would look and see how, what kind of place could I get for just a one bedroom on my own? And here's why. I think it's hard to not stunt your growth and progress while living in mom's house. I would say 90 % of the time someone tells me they're living at home, they're usually not making the progress they should be based on how little their expenses are.

58:59Yeah, I'd rather you have an outside roommate than live with mom or dad. Because I think you can get out of this debt in even renting your own place. You can be out of this debt in two years if you got serious. About two grand a month, your debt's cleared. Yeah. So the question is, how do we create that margin of two grand a month, even if we were renting somewhere? And if you're bringing home four or five grand a month, all right, now we know we need to live on three grand max to make this goal happen right right I think that's I think that's what I I have been I know I don't think you guys I haven't been casella tense I know I haven't I know I'm just trying to kind of um manage life right now and and still have fun but stay off debt too so I think I know I can do better like I know I can go full force I just find that when I do that, it's like, it's just, I just think it's all stressed, you know, but at the same time, I like that as a stretch.

59:55Yeah. I mean, it is hard to, the things that we're talking about, again, they are simple to say, but when it comes time to do them, they do. It takes a lot of mental energy to stick to a plan. It takes a lot of mental fortitude to do the things that you say you're going to do on your budget. And it really does become a full-time job, you know, to pay off your debt. It's like, all right, every day I'm thinking about it. I wake up, I check my every dollar budget. I'm tracking my transactions. I'm having to pack my lunch. You know, I'm having to make sure I take the food out, you know, of the freezer for dinner.

1:00:27So I'm not ordering takeout. It is a lot, but you kind of have to reframe in your brain what's more stressful. Is it more stressful to be 41 years old and, you know, not really able to, not feeling confident to do life on your own or is it more stressful to for how long was it george two years two years two grand a month yeah you'd clear this i'm ready to do it you got because here's the question mark can i ask you this how much progress have you made while living at mom's house rent free with no expenses have you thrown all the extra at the debt no i haven't thrown all the extra but i have paid off debts i have paid off um several lines of credit um i mean i am doing it um but i have not i have not every, you know, you gotta, you gotta feel, you gotta feel the boiling water.

1:01:13It's like a lobster. You gotta feel the boiling water. It's going to make you want to jump out of the pot. And that's not a knock on you. I think if I asked most people, they would say the same thing. In fact, I talked to one couple who went further into debt while living with their parents under the guise of, well, we moved in so we could pay off debt faster. But instead what happens is you get kind of comfortable. You don't really feel the fire when you have a place to sleep and you're not even paying the rent and so you go well i need a little cushion i deserve i deserve to go out tonight i deserve to do doordash yeah i think when you're on your own it's gonna you're gonna feel it in a good way where you go these are my bills to pay now and i'm a grown woman yeah i'm gonna knock out this day i miss some i miss things happening at home where it's definitely give pushing the button where i'm like okay i think yeah your own space i want to i've been wanting to and there's the social component too you have that there's the social component of you being able to live your life and meet someone and all those things that go along with this.

1:02:07So just remember, money touches every area of your life. And for you to be really that full, complete person, you want to get those areas healthy and put them in a place where you can really grow to your fullest potential. And living on your own at 41, it's just, it's got to be part of the deal. Yeah, this is a choose your heart situation. Either way, it's going to be hard. But I think the independence that you'll feel actually will cause you to make more progress. Well, yeah. And then there's the time limit to because if you say, well, it's just harder for me to get out of debt, then you're going to be struggling indefinitely.

1:02:38But if you say, well, it may be hard to get out of debt, but it's only for a two-year period, then you get to shorten the length of the hard season. And that, to me, is a no-brainer. Yeah, that's true. We've got time for a quick social question. Oh, my fave. You ready on this? Yeah, which one? This is from Tracy in the Ramsey Baby Steps community. What are your thoughts on credit cards that offer 0 % interest? If someone budgets, wouldn't these be a helpful financial tool? okay so i'll be honest with you and george this is this is where i stand on this i know plenty of people who will say oh yeah i'll just take it and i'll pay it off every month and they never will they just they think one thing and another the promo period ends and now it's 29 apr all the way back to their yeah or you fall on hard times and what you intended on doing just doesn't happen then there's so many variables that can keep somebody from paying off a zero interest credit card.

1:03:34And then there's a whole thing of like, okay, maybe, maybe there's no interest, but it's still something that you owe. If you allow it to accumulate just a little bit, you lose your job. It's just another added stressor. So for me, it's kind of like, what's the problem with making an income and just spending the income? It's kind of like, it's kind of an insult to yourself to go to your job and work hard every day and give your time and your money and your effort. And then you look at your paycheck and you go, eh, that's not enough. Toss it to the side. I'm just going to take this credit card instead.

1:04:03I like that. Just become your own line of credit with money you actually have. And that's 0 % interest, money all day long in my checking account. And I don't have to pay it back. And you make more intentional decisions when it's your money and you're using it now. So that would be my retort to our friend Tracy.

1:04:27you

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1:06:05Well, our team has been working hard behind the scenes to bring you guys a brand new tool. It's called Ask Ramsey, and it's our free AI tool that is built and trained on proven Ramsey principles. And today we're going to break down some of the most asked questions from the week. And there was a lot of themes here, Jade. Yeah, people are asking, of course, we're in tax season, so they're asking a lot of questions about taxes. And mortgages are always a hot topic. And so refinancing, should I pay the mortgage off early? All of that. And then cars, George. Cars seems to be a very popular topic as well.

1:06:35A lot of drama and emotion around cars. And here's the number one question we've been seeing. How do I know when it's time to stop putting money toward repairs and decide to sell it and buy something else? Very common riddle. So let's go over just some basic things to consider here. One is how much is the car worth versus the repair costs? If the car is worth$3 ,000, the repair cost is$4 ,000. well this is a bad idea yeah and you know here we're always telling people to get a cash car a beater and so they're thinking okay i'm doing a lot of repairs to this car you know is it is it too many repairs have i hit that point where i've just is it in the shop more than i'm actually driving it that's a problem probably time to replace it and then are the repairs around crucial safety items or is it like a this would be nice to have or it's cosmetic or just it's an annoyance yeah and then your personal budget matters too do you have the money can you even afford a different car.

1:07:25Right, you might not have a choice. So I thought it would be fun to actually pull up Ask Ramsey live. Our folks in the booth have it running back there. And let's use a real life example. Because what's cool about Ask Ramsey is it'll personalize the advice and ask you questions to dig in just like we would on the show. So let's try it out. Let's assume I have, this is a real car that I owned not too long ago, a 2009 Honda Civic. And it's worth about$2 ,500, which hurts my heart. And there's a transmission repair needed for about$1 ,500. All right. So those are numbers. The car's worth$2 ,500. Repair is$1 ,500.

1:07:58So they're going to input that and it's going to be asking them some follow-up questions. Here it is. What's the estimated repair cost? It's$1 ,500. And it says, how does it compare to your car's value? Well, the value is currently$2 ,500. So the goal here is Ask Ramsey will kind of help us make a recommendation on what we should do next based on our situation. And it does an incredible job. our team has been walking us through this. I am so impressed with how on brand it is. It's the advice you would get right here on the show, but you don't have to call in and hope that you can get through the phone line.

1:08:29So this is something you guys can jump on ramsysolutions.com and do for yourself right now. So here's what it says. If it's$1 ,500 gets your car running reliably for another year or two, and there aren't any other big repairs coming, fixing it is likely the best move. I couldn't have said it better myself. Yes, but you should experience the full potential by signing in. Yes, because it can save your chats, which that's a good point. If you sign in, it can actually save your chats and histories. You can go back and reference it and continue the conversation. So here's my challenge to you guys. I know you've got questions.

1:08:58So jump onto RamseySolutions.com. Try it out for yourself. Give Ask Ramsey a test spin. It's right there on the homepage. Go to RamseySolutions.com. You'll see a big open kind of search bar there as you scroll. And that is Ask Ramsey. You'll see our faces next to it. Or click the link in the description if If you're listening on podcast or YouTube to check it out again, that's Ramsey solutions.com. The tool is ask Ramsey. We are very excited to see how it helps so many people that we can't get to the inbox is full for the Ramsey show that people that we just simply don't have the time to get to.

1:09:28So think about this. It's like Google, but a thousand times more powerful because it's not giving you a bunch of random answers that you don't have to sort through it. Exactly. So check it out. It's great. Lori is in Memphis, Tennessee up next. What's going on, Lori? Hey, thanks for taking my call today. Sure. My husband and I have always been on the same page financially. We've been very blessed, and we are debt-free. We have$2.8 million invested. We take out just a minimal each year to live on. But we do have some fun. We like to travel. We've purchased a new car with cash, different things like that.

1:10:07But we have a little bit of a hard time letting go. and just living, you know, afraid of what might come around the corner, how long is that going to last us. We retired early at 55. I'm 58. He was 60. So we do have a ways to go, you know, with health care concerns and everything coming up. Sure. You guys could go another 35-plus years. Yes, exactly. So it's wise to be thinking about that. And you said you have 2.8 in your nest egg? How much are you pulling off it every year? Every year together, we're pulling out$79 ,500. Okay, let me give you the numbers on that. That's 2.8 % of your portfolio you're pulling out every year.

1:10:51Yes. And if you talk to any financial advisor in America, they would tell you that you would never run out of money if you were taking out 4 % or even 5%. You know, with health care costs the way they are today, we're trying to get our insurance down. and it's just difficult for us to let go. Sure. Well, what you can do is you can kind of estimate, hey, if we have long-term care insurance, here's how much we're going to pay for that versus paying it out of pocket. Most people are not in a nursing home or private care for 10 years. They're two to three years. Yeah. And so now you know, all right, it's going to be 100 grand a year for that.

1:11:28So we should set aside 200 to 400 grand to cover us for those things down the line. That's kind of the worst case scenario, right? Yes. And so now you know, hey, if you have$2.8 million, if you just live off of the growth and leave the principal, you'll be just fine. Because I know what the stock market has been doing. I don't know what you're invested in. I hope it's not just totally in bonds and cash and you've actually got some equities in there. We're the financial advisor, and we do make a good return. I think we got 17 % this past year. Yeah, 17%. So think about that. On$2.8 million, that's enough for you guys to spend for like five years just off of that.

1:12:08Yeah. And so I think part of it is looking at the math and the reality of it, and then part of it is flexing the muscle. I've gone, man, we work so hard to flex our savings muscle, and it is looking good. And then this other muscle, the spending muscle, is atrophied in the meantime. And so it takes time. It has. It takes time to let go. You wrote a check for that new car. How much was it? well we had a trade-in and we uh spent 47 000 cash did that shock you did that like hurt your soul a little bit to write that check it did and then the next time you do it it's going to hurt a little less isn't it because you're like oh i've been here before we're gonna we're spending 50 this time and it's kind of like all right our life didn't change we're not broke i know we've always paid cash for cars our home is paid for we put our daughter through college she's graduating with a four-year degree and her master's degree this uh this may amazing so and she's going to be you know debt free from college so we've done the right things it's just at this point we're still young to be retired and you know we're just afraid of taking that next step and kind of letting go a little bit i mean even to the point of you know we thought about putting in a swimming pool for example and that's seventy thousand dollars and we said uh we we can do without the swimming pool i think what george says is a really good exercise when you feel fear about something, you've got to decide, is this something I can solve?

1:13:28Like usually the ones that are kind of like vague and kind of ambiguous, oh, if I spend this money on the pool, I'm going to ruin everything. Well, what's that mean? Like drill that down and try to make it a more realistic fear so that you can actually solve for it. What are you going to afraid, what are you afraid is going to happen? Are you, and one of the things you mentioned is healthcare. Are you afraid that a$70 ,000 pool is going to keep you from having healthcare in your later years? Well, then you just you have to ask yourself is that actually true and when you say no it's not because i ran the math it's not true now now we're talking about true versus false it's not even you know a thing of fear anymore is that even true can i give you something that's true if you made 17 on 2.8 million that's 476 000 oh i know that's multiple swimming pools and that's not even touching the principle and so again looking at the facts and going we're going to be okay The pool thing comes into play because when you resell your house, can you get the money back out?

1:14:26Who cares about resale? You're not even thinking about reselling your house because you're thinking about putting in a pool. That's a question for your kids to have if this is where you want to stay long term. And the resale value, it's likely not going to tank. It may not go up significantly enough to cover the cost of the pool and the maintenance. But you're not doing it for that. You're doing it to enjoy. That's why you work so hard and retired early and busted your butts investing over the long haul so that you can enjoy it. So remember this part. live like no one else so that you can live and give like no one else.

1:14:55And part of that is literally forcing yourself to enjoy the money in a budget. And so I would up your fun money, Lori, and up his fun money to an amount that kind of you're like, this is uncomfortable to spend this much on myself. Cause you go, I don't deserve this. I'm not worth it. What if I run out of money? And instead start going, I deserve this and we're not going to run out of money. We set ourselves up for a life of abundance, not scarcity. And doing that budget and forcing yourselves to spend over time, I think you'll get there. And a good exercise, go do the pool and realize you're okay.

1:15:27We're down to 2.73 million now. Oh no. What are we going to do? You got this.

1:16:13Gloria is in Albuquerque up next. What's going on, Gloria? Hello. Hello. What's going on? Thank you for taking my call. So my question is, we are on baby step six, and my husband and I are both teachers. Our son is 28. He's been married for five years. This last year, he has stopped working to do full-time Christian recordings. He's a musician. He's a Christian recording artist. It is not paying him at the time. He's trying to build up an album. He has about 47 ,000 monthly listeners. Great. And so, yeah, we're excited. 47 ,000? Is that like Spotify listeners? Yes. So you probably made$4 this month from Spotify.

1:17:01That's exciting. Absolutely. Love it. Absolutely. He's also the music minister at church. That does pay him about$600 monthly. His wife is a teacher also, and so right now she is providing financially. We're hoping that this ministry helps him provide financially. But he is living, they are living in our rental. The rental has not been making any profit. They pretty much just pay the taxes, maintenance. And so even though we're on baby step six, my husband and I are contemplating on just gifting him the home or gifting them the home. And that's my question. And am I, are we doing this wrong? Are we supposed, yeah, financially?

1:17:50I feel like God is just providing in every way possible. We don't even feel not getting that passive income. We don't feel it. He's just, we're blessed right now. And so that's my question. The rental is paid for in cash? You don't owe anything on it? Yeah, the rental has been paid. We paid that off quite a long time ago. And in our home, we owe about$86 ,000. We are set free, thank God. When will you be done with yours? Well, I'm hoping in five years or sooner. Because we can put about$2 ,000 extra a month. And I will be graduating with my PhD in December. and so I feel everything is in place.

1:18:42What's your home worth? It's worth maybe about$300 ,000. Our neighbors have sold for about$500 ,000, but ours is three bedroom. What's the rental worth? I'd say about$150 ,000, but it would probably sell for less. Okay. So why gift it to them? Why not just say you guys don't have to pay the costs? right now for a season? That's a good question. Because there's also tax implications you got to think about. Because if they inherit the house, they'll have a step up in basis versus what you paid for it. And now they're paying the capital gains if this house continues to appreciate. So that's one piece.

1:19:23And the other part is I don't like artificially propping up their life because I want them to have a sense of independence and be able to cover their bills on their own. and I also know he's pursuing a dream right now and he's on the way. He's doing great. And I also know that Jade and I are musicians and there was a time I was working full-time and doing albums and playing gigs at night and that's just the path of being a musician and being in that world. And so I would encourage him to figure out a way to cover his own family's bills while pursuing this dream if that's possible. I hear you. That's kind of how I started this journey too is I hustled quite a lot to start these steps.

1:20:04And my husband and him were like, no, I don't want to do that. And then when they saw me getting stuff paid, they're like, all right, talk to me. And then we all hopped on the Dave Ramsey, the baby steps. And yes, everything you're saying actually makes a lot of sense. I guess being emotionally invested, you know, he's our son. And two, the most important thing is that it's a ministry that he's doing to try and bring others to Christ, and that's where it gets really tricky. Yeah. I mean, you can support—if you want to support the ministry in that regard, that's fine to do that and say, hey, we want to gift you$1 ,000 a month for the next year so that you're less worried about your bills and to support you as you pursue this album.

1:20:50Who's paying for the album? Because that's not cheap. They have money saved up. Like before he got married, I made sure he had a fully funded emergency fund. Good. Yeah. Okay, so they're not struggling. For the wedding and everything. They didn't do this out of a place of desperation. They're still doing fine, even with teacher salary and his$600 a month from minister at church. They're doing okay. They don't actually need your money. I just – see, I don't see those things because I'm – yes, I need it. And that's why I called because I'm like, I need to see someone who's not emotionally involved.

1:21:29Is it just you or is it your husband too? Both of us, my husband and I, he's our son. And he is 100 % on board with this or does he have any qualms? Well, no, he has no qualms. We just feel, I don't know, I just, we're trying to stay faithful to God and put this feel that he's just telling us to, listen I'm not I'm not gonna if you tell me God told me to do something I'm not gonna be the one to tell you I'm not gonna get struck by lightning getting in between that right but um if you want to know just practical or logistic thoughts I I'm with George in the way that I think they're at a critical point of um deciding what they're gonna do and having the having the motivation to work for it for most of us the motivation is I gotta take care of my family I gotta make do you know what I'm saying?

1:22:22I have to hit certain standards in order to live and survive and provide a life. And that creates great motivation. And when that's kind of taken out from under you in the form of a gift, it can actually end up taking away, right? It's like, you feel like you didn't really earn it in a sense. Yeah. We we've talked about, can this move hurt him? Is it, is it removing, um, part of his contribution? Cause they're so young. They're so young. They're just getting started. They're 26. You said he's 28 and been married five years? Okay. Here's what I would do as a parent. I would not cover his bills.

1:22:58I would help fund the dream. I think that helps you separate this in your mind. I'm not helping prop him artificially. I'm just going, hey, I believe in this mission. I believe in this music. I'm going to help pay for the publicity for the album, or I'm going to pay for the recording studio time for the album. That is a great blessing. And you could still have the goal, like knowing in your hearts, you are going to gift him this home initially, or I'm sorry, eventually, but just not yet. I just feel like, if you're asking my opinion, it feels very early in his growth and in his career to do that.

1:23:31Okay. And our journey too, financially, we're trying to see, should we skip this step? Because we are not in step seven. And that's where the rule, I mean, we tithe, but we don't give like we want to. So hopefully we will get there. What do you mean by should we skip this step? Well, because we're on baby step six. And then when we really give, that's what comes with baby step seven when you are just yeah, when you're just like ready to okay, where am I gonna? And that's the other part of this. That's the other part of this is you still have a mortgage that you need to pay off. And I'm not suggesting that you need to sell this house and pay off a or anything like that.

1:24:15But I am saying that to get yourself in the proper position to really be able to be that outrageously generous is going to make you feel even better about the gift, I think, when the time does come. Okay. Good. Very good advice. I had not thought of a lot of angles that you all brought up. There's some big implications. It's a big financial decision. And so I would just start small and you can always ramp it up later. And so if you want to let them not pay for living in the rental right now, that's a nice thing to do. If you want to give money towards whatever pieces are left for him to fund the dream that he wants to do, that's also wonderful.

1:24:54But I wouldn't just gift him a house right now. I think it's too big of a move. There's just a lot of dignity and going out and being able to provide for yourself and hit those milestones that I think we all want to hit. Now I'm sure there's a lot of people listening right now going, you're stopping him, you know, you're stopping her from giving you a house like you're blocking. Yeah. But it's true. You know, there's something to be said for that. Well, the thing is, he doesn't need a house right now. He needs a successful music career. Yeah. And so anything you can do to actually help that part, I would aim my financial guns there versus just helping cover the bills because that's not really where they're struggling.

1:25:30What he needs right now is get the word out. You know, let's get more listeners. Let's get, Maybe it's, I don't know if it's a record deal, a songwriting publishing deal. There's a lot of other moving pieces to this, and I wish him the best. 47 ,000 listeners is about 47 ,000 more than I have. So keep it up, my man.

1:26:09Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by bestselling author Jade Warshaw, and we're taking your calls at 888-825-5225. Elijah is in Boston up next. What's going on, Elijah? Hello, how you doing? We're doing great. What's your question today? so uh my fiance and i we currently have a hundred and thirty thousand dollars saved up um we have an additional hundred into like stocks and stuff but we really just want to leave that and we're looking to use 130 to buy a house first initially we got pre-approved for like 350 we put in an offer on the house had an inspection done and found out all these things are wrong with it so we backed out of the deal and um we're like well maybe we should just build a house We have no experience doing that, though.

1:27:02And it's the wintertime where we live. We're actually living in a camper right now. We did that. We sold our house, bought a camper. This way we can downsize and save some money. So you had a house previously that you owned? Yeah, this was about five years ago. We sold it, and, you know, we kind of downsized. We wanted to just kind of, you know, have less debt. We really didn't need that much space anymore. But now we're finding ourselves in a position where do we buy or do we build? What's your budget for the house? What is our budget to? So we were looking to spend, if we build,$130 ,000 is pretty much our budget, not including the land.

1:27:42We figured we'd finance the land and just pay everything else out of pocket. Okay, well, all in then, how much do you plan to spend? So$130 ,000 on the actual home, how much would you spend on the land? so we for example we found a piece of property in the area where we live it's 40 000 we put down 25 that's 10 but you know we still got to do a septic a well you know all these utilities and and it's just so is the goal to live like off you know off property off the land somewhere not in a society is that your goal well no not like off grid that that would be great but it's just we're in our area it's really not an option um you know most of the land that we find it's like we have to be on utilities to some degree in this area is so you know i'm excuse me i'm our goal is just to be debt free we have all this money we're like why do we need to go be in debt right now well it almost sounds like you had one bad experience and it's kind of turned you off to the whole thing and now you're kind of gone not to say that building a house is an extreme but it's kind of like you went to the extreme of well if this didn't work out we just have to go build our own thing and start from scratch.

1:28:50If you want to build a house and start from scratch, I think that's great. But if you just had a bad experience and maybe you just need to spend a little bit more time with another realtor or looking at some different properties, why not just do that? So I think you guys have to decide what it is that you actually want. Yeah. What do you want? Well, I guess what it is. Yeah, that's the thing is that we just don't want debt like in our area the houses are just selling for like well above uh you know what we're willing to pay you know four hundred thousand dollars and these houses are still like fixer uppers you know and it just it just doesn't justify putting ourselves in debt right i see how much do you guys make uh so we make together over like about 120 000 a year great are those remote jobs or you have to be there in office well i'm a school bus driver and uh and And she's a nurse, so we have to be in office.

1:29:46Okay. Because I'm just thinking you don't want to be 45 minutes out somewhere with septic and trying to do all that. First of all, it's going to be a full-time job if you're going to build from scratch and deal with all these contractors. And so I would start for now to avoid the headache of what you guys can afford in your area. And even if you had a small mortgage that was very reasonable as far as your take-home pay is concerned, that's okay. It's not a sin to have a mortgage, and you can knock it out fast and get aggressive with it. and if you're going, hey, I cannot find anything for$130 ,000, welcome to 2026 in America, especially in Boston, Massachusetts, which is where I'm from.

1:30:22So I can tell you, it's not cheap over there. And if you guys live there, you're going to have to decide, do we want to rent and for a while until we can have more money so that this is less of a burden or we can pay cash, or do we just want to go, we're going to put as much down as we can, sell the stocks, put$200 ,000 down and get a$50 ,000 or$100 ,000 mortgage. How long did it take to save the$130 ,000? Um, well, honestly, it took us about a year or so. And a lot of it had to do with when we sold the house. Yeah. How much of it came from that? Um, well, honestly, we have in total 230, but I don't know what we what we have in this in stocks, like what we've gained.

1:31:01I mean, you know, like what it's valued at. But so you have 230. Hold on. Let's sort through this money. Yeah. How much is in stocks? a hundred of it is in stocks and then and then we put 130 away for like it's called our house fund okay so you have if you were to sell off the stocks somewhere around 230 total okay yeah i'm asking yeah is there any money anywhere else we should know about okay uh does that um go ahead no no no no nothing else no okay so you would definitely want to have some sort of an emergency funds set aside. So some of that money needs to be set aside. You keep it liquid, keep it in a high yield savings account.

1:31:40But I'm with George. I think that if you can, I hate debt too. I do. But I think with this real estate market, there is something to be said for getting in when you can get in and when you can actually afford to do so. And I think that if you guys can find something that's no more than 25 % of your take home, when it's all said and done on a 15 year fixed rate, I would do that in two seconds. And that's exactly what I did, Elijah. We, on our first townhome, my wife and I, we put down 40 % because we're crazy people, and then we paid it off in 26 months because, again, we're crazy people. That's what I suggested.

1:32:13I'm like, well, what if we just put down more money? At least then we'll have, you know, our mortgage won't be so high. We'll have less debt, and then we can work on paying it off faster. And even if we ever decide to sell it, we have more equity in the house. Exactly. And so that's what I would do. Put down as much as possible, which lowers your mortgage and your payment, which allows you to have more margin to throw at the mortgage to knock it out fast. Because here's the other thing you got to think about. If it takes you five more years to save up and pay cash, well, guess what happened to the housing market in the next five years?

1:32:40It went up. The goalpost keeps moving. And so do it when you're financially ready, when you can get that payment to 25 % or less of your take-home pay on a 15-year fixed, and you find a house that you guys go, this is great. Yeah. I mean, if you sold off those stocks, let's say you kept$30 ,000 aside for three to six month expenses, and let's say you found something that was worth$350 ,000, you put$200 ,000 down, that's great. 15-year fixed-rate mortgage, you're right in the parameter that you need to be. Yeah, what you're going to get for$350 ,000 may not be what you're picturing in your mind, but you got to start somewhere and you got to get in where you fit in.

1:33:17Yeah, and two years from now, that house is paid off and now it's worth$400 ,000. Exactly. Now you can roll all of that into another house and do the same thing or even pay cash with the money you can save over time. I really hope that there's a way that I can get this call and play it for my fiance because I've been trying to say this and she's like very skeptical understandably so but she actually introduced me to you guys oh great listen she will listen to Jade Warshaw yeah I'll tell you that much and you're lucky for you everything we say is on the internet forever so you can tune in on YouTube and catch this call and we can have our team send you a link as well so that you don't miss it.

1:33:55I like that. Yeah. Get into that. If you haven't already, go to RamseySolutions.com and look at the mortgage calculator. And that's all I use to figure that out for you. You can use it too. And you can calculate it at an interest rate, 15 year fixed rate. And that's how I did it. And while you're on the website, you can reach out to a real estate pro in your area. And this is a crew that we have vetted, real estate pros that do it the Ramsey way, who aren't going to let you buy a house that you can't afford, who want you to become debt free as fast as possible. And so, man, I think you just need some tools.

1:34:24You need some tools, some math, some reset expectations, and maybe let go of the baggage of the past of how we feel about home ownership. Either way, it's going to be hard. But I love your dream of becoming debt free as soon as possible.

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1:35:45Guys, the VIP package is officially sold out on the Live Like No One Else cruise, but there's still a chance to lock in the preferred package, which gives you extra access, better seating for all the events, and more time with Dave and us Ramsey personalities on board. We're so excited for this. If you're debt-free, this is your chance to celebrate with us. You can secure your cabin with a$600 deposit today and join us in the Western Caribbean in March of 2027. Click the link in the show notes, or you can go to RamseySolutions.com slash events to book your cabin and get the preferred package before it's gone.

1:36:18It's going to be a good time. David is in New York up next. David, welcome to the show. Hey, guys. Thanks for taking my call. I love the show. Thank you. So my wife, yeah, I appreciate it. My wife and I are in baby step six. And about a year and a half ago, I was laid off from like a tech executive leadership role that I had. I was making really good money. We were plowing through, paying off a mortgage and saving for retirement. And then for the following year, I just really hunkered down and was applying as a full-time job and I applied to 1 ,500 jobs and I stopped counting. But about six months ago, I took some various jobs that I could find within my network here.

1:36:58But my income has gone down from like$250 plus bonus down to like$50K. And my life works. But what I'm trying to decide now is do I keep looking for tech jobs in this greater New York City area, which hasn't really connected yet, or do we take the equity out of our home here and move to a lower-cost area that we've already been talking about doing, like North Carolina or the greater Atlanta area, where there is a tech economy, and the hard part there is the grandkids. So that's the hard part we're wrestling with. Are the grandkids in New York City? Yeah, I have three of my four adult children live in the area, and they are all now married and have little ones.

1:37:39Oh, that's fun. Well, taking the job out of it. All of them are open to the idea of moving. Yeah, take the job and income out of it. What would you guys do? Stay in New York City or move? We would move, and we've already had two of our adult children say that they would follow us because they can't afford to live for either. So it's like, hey, we could all use some lower cost of living. You'll just be the first to go. Totally. Well, have you applied to jobs out there? Do you have any connections out there? I have. I mean, I've applied up and down the East Coast with some of those tech areas. I think what happens, though, is they don't take you seriously.

1:38:14If it's a hybrid job and you don't live in the area, it's really hard to break through. So I wonder if I position myself there, if they would take me more seriously as a candidate. It would be easier for women if you're local. Exactly, yeah. And I've had a lot of interviews. It seems like the whole remote tech thing has gone now to hybrid things. Yeah, that's died out. And people are going, nope, I want you in office at least some of the time, if not the whole time. And so that's, I think, going to be their foreseeable future. I would try out some of Ken's tools and resources before you make any of these decisions because he's got a great book called The Proximity Principle.

1:38:51And it will help you figure out how to not just be another digital resume application in a stack. Because applying for 1 ,500 jobs, you can pretty much do with the click of a button. And so you and everyone else and AI is now applying and bots are applying for jobs. And so you've got to stand out in the crowd. You've got to know somebody. You need to have some kind of connection referral. And even here at Ramsey, the ones that get to the top of the pile are the referrals from team members going, hey, my buddy, he's sharp. He's applying for the job. Can you guys take a look at it? And straight to the top of the stack.

1:39:22That's what you need. What would it mean for your wife's job if you guys were to move? Yeah, she has a job. Thankfully, her company is national and she can do her same job anywhere. Okay, good. And the good news is she has the health insurance right now, so that's good news. Great. What's she earn? She's making about$50K. Okay. So you guys are making it work in New York City right now on$100K? Yeah, it's tight. We have about$200 to rub together at the end of the month, but as long as we don't have a major expense. Here's the part that scares me, though, is our emergency fund went down from$50K to$5K.

1:39:55Ooh. Yeah, it's precarious for you. So you're partially sort of artificially funding this from the emergency fund? yeah i mean most months we keep we were treading water if there's a big expense it does dip back into it which is scary obviously yeah this is becoming more and more of a it would be nice to we have to do this yeah i think so too i agree you're on the cusp of going into debt we have every weekend if you didn't do tech what would you do i mean i've looked i know i have transferable skills so i could i could lead like a client services organization i'm helping my friend right now with like, you know, RevOps and building out his construction business.

1:40:37Have you applied for like adjacent type roles? I have about five versions of my resume and I've been applying to a variety of them. But I'll tell you that the best interviews that I get are the ones that are like, you know, executive recruiters that reach out to me. That tends to go further. I've been a finalist more times than I can count. Yeah, it might be worth kind of using a headhunter to help you get in the door. if you have that level of experience and people are looking for top talent. So there's a lot of things you can do, and I just don't want you kind of spinning your wheels while running out of money in the meantime.

1:41:12And so that might mean finding extra jobs right now just to float you to not dip into that emergency fund until you guys decide to move or you get a different job. And it might be on her too. I think she needs to find a better-paying job if you guys are going to stay in New York City. Yeah, I know. It's tough here. It's very expensive. Thankfully, we have a ton of equity in the house. So if and when we do move, we'll make out really well. Yeah, imagine being able to buy something in cash in North Carolina and make the move and make more money than you're making. You're going to feel like a bajillion.

1:41:45It'd be fabulous. Well, I'm wishing you the best, man. That's a tough job market. It's not on you. It just really is tough out there, and it's going to take getting a little more creative and a little more personal to get that gig. Tori is in Dayton, Ohio up next. Tori, welcome to the show. Hi, thank you for taking our call. We have a 30-year mortgage and are wanting to pay additional on the principal so we can afford the 15-year. If we dropped our investing from 15 % to company match for only two years, in addition to what else we can squeeze from our budget, we could get the principal low enough to afford the 15-year.

1:42:21Would that be wise? Or debt-free, accept the mortgage, make$175K annually and already have$350K in retirement? Cool, cool, cool. So you're saying you want to lower investing in order to afford the 15-year payment as far as if you refinanced? Yes, yeah. And just lowering the retirement so it gives us an extra grand a month to put towards the principal on top of everything else we're going to be throwing at the principal. Why do you feel the need to refinance? Why not just throw any and all extra money at the principal when it comes time to do so? so we are doing that i think just sometimes when we look like on your all's um calculators and things it's just like so much interest we're paying and so we would like to get to the 15 year but the faster you pay it the less interest you'll pay technically afford it with the principal that we still owe yeah the principal still applies though as i mean principal ple that if you put extra on the 30 year you're going to save interest as well right and so i wouldn't do it.

1:43:25I mean, I'm a big fan of the 15-year mortgage, but there's a time and a place to refinance. And that is you're debt-free except the house, you're investing 15 % and can keep it there. You can comfortably afford the 15-year payment. And you got to think about the break-even point. It's going to cost you 2 % to 5 % of your loan to refinance. So if it costs you$8 ,000 and it saves you$400 a month, well, you got to stay there 20 months just to break even. And so that's the part that worries me. I don't know that you're going to see significant savings instantly to the point where this is a no-brainer.

1:43:55Now, if you had an 8 % mortgage and you can go down to a 3%, well, the numbers might make sense. But if you're going to go down 1 % and it's going to take five years to break even just so you can feel better about it, I wouldn't do it. I would just pay aggressively on that 30 and pretend like it's a 15. Okay. Okay. That makes sense. Thank you. Absolutely. You can crunch the numbers on our mortgage payoff calculator. Just use your 30 year and say, if we put two grand extra a month, we would save$100 ,000 in interest and pay it off in the next seven years. And so just, you can still be aggressive about the goal.

1:44:28And maybe there is a time and place you refinance and it makes sense. But I don't know based on what you told me of having to lower investing to make this happen. That's the part that I was like, eh, that doesn't feel right. If you can go back in time, we probably realized you shouldn't have bought this house with this level of mortgage. But here we are. It's okay. You guys are doing great. You're crushing it. You got money in retirement. You make great money. I would just aggressively attack it and knock it out. And a great reminder, if you guys want to check that calculator out, it's completely free, RamseySolutions.com.

1:44:57It's our mortgage payoff calculator. It will light a fire under you to see that amortization schedule. Indeed. And how much you're giving your lender as a gift for them giving you this loan. It's generally in the six-figure range is what you're going to see is what you gave them on top of the loan. That hurts your soul.

1:45:35Hey guys, what's up? It's Jade and I'm pumped for the new year and I hope you are too. But the problem is most people start the new year with a lot of promises and no real plan. You know how it is. I'm going to save money or I'm going to get my financial act together. But without a plan, you just wing it and hope it works out. Listen, don't play yourself. I want you to win. And our EveryDollar app is the game changer you need. In 15 minutes, EveryDollar helps you build a plan based on where you're at with money right now. And every day, the app coaches you with ways to find extra money so you can beat debt and build wealth faster.

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1:46:39In the lobby of Ramsey Solutions on the debt-free stage, we have Brian and Tara with us. Welcome, guys. Hi. Where are you guys from? We are from Clarksville, Tennessee. Right down the road. Wonderful. Well, thanks for being with us to celebrate. Congratulations. How much debt did you guys pay off? Thank you. We paid off$411 ,500. That's a lot of dollars. It is. How long did that take? It took eight years and seven months. Wow. Awesome. And what was the range of income during that time? $70 ,000 up to$250 ,000 now. Wow. Excellent. What was the raise due to? Was that just you guys working harder?

1:47:18Someone got a job? Got promoted? Yeah, promotions. I mean, we took on some side jobs. Started a couple small companies as well throughout the way. So a couple different things. That's incredible. Okay, what do you guys do for a living? I'm the chief operating officer for Ready Mix Concrete Company. Okay. And I'm a teacher slash stay-at-home mom. Awesome. That's a fun slash. Yeah. Okay. And what kind of debt was the$411? So it was student loans, two cars, lots of credit cards, and then our mortgage. Whoa. Wow. Way to go. I wondered. You just busted through. We did. Okay. Did you even stop to breathe, or did you just go right through two, three, into four, five, six?

1:47:58So we had a little bit of a lull after we paid off all the consumer debt. And then we just jumped right back in. Wow, that's exciting. And I got to ask, what was the mortgage comparatively to the consumer debt? So the mortgage was about$298 ,000. Wow, okay. The consumer debt was$113 ,000. So what was the spark that lit the flame to start all of this eight years back? I'd say family. Her sister was following the plan with her husband, and they kind of talked to us about financial peace, and we started along the way. Yeah, when we got married, she gave us the CDs, the Total Money Makeover, and we listened to those together skeptically.

1:48:40Yeah, I was going to ask, how do you get someone on the Ramsey plan? Because you must have taken it as a diss when she's like, hey, you need this. Listen to these CDs. You guys are broke. Yeah, well, she gave them to us and we listened and we were kind of like, eh, we like it. Good ideas. So we kind of started paying off a little bit of extra debt here and there, but we did like the Davish for about a year It wasn't until we took a job in Texas and we started making us a financially larger amount of money And then we looked at our bank account one day and we were like hold on a second We're still living paycheck to paycheck.

1:49:16Where is this race going? and we We looked at all of our budget items and kind of figured out where all the money was going. And we were like, whoa, we're spending that much money going out to eat? That is crazy. So we got on the every dollar budget and we started to just cut everything out that we didn't need to have. And that's when we really started going gazelle against all the debt. Wow. You just were like, we need to be doing better. This is insane. Like we were making so much more money. and did lifestyle creep hit you where you were just kind of spent everything extra that you were making yeah for sure i mean we were we were going out to eat a lot i mean you never realize how much money you're spending in restaurants do you actually look at it and so yeah it definitely hit us i mean we made more money but we spent it as well so how long did it take to do the first portion so the first portion of this is like 111 000 that's like the the the consumer debt how long did that partake so that took us 22 months okay fast and so then you decided you know what that feels really good.

1:50:16We're going to start working on the house. And it sounds like you really were just intentional about it. Not nearly as intense, maybe as the other debt, or was it just as intense? It was definitely more intentional. I think we made a lot of sacrifices and took on some extra jobs. Like he said, we opened two businesses and that brought in a lot of income on the weekends. And yeah, that's really cool. I'm curious, what was your like life hack to paying off this mortgage early because people and you see tick tocks about how to do it and i go just pay extra on the principal so were you guys paying an exact amount of an intentional goal or was it hey depending on how much we have extra this month we're going to just chunk it at the mortgage we just chunked it at the mortgage every month i mean whatever we didn't spend on the budget we we put towards the mortgage what was like the lowest amount you put on the mortgage in a month and what's the highest you remember oh so we we get a yearly bonus oh nice so we pretty much threw everything extra during the year and then when we got the bonuses we would throw it at it that's incredible i think one of the largest was eighty thousand dollars oh that was that's gotta feel that's juicy yeah that's nice that is incredible well you guys have worked your tails off have you done anything to celebrate we went on a cruise just one just one just one so far so what do you tell people the key to getting out of debt is house and everything i think you've just got to start chipping away i I mean, you look at the number, and it seems like a really big number.

1:51:43It seems like you'll never get there, but I think every little bit counts, and you just got to work your way towards it. Yeah, and sticking with a budget also. If we hadn't got on the budget, we would have never been able to do it. So figuring out how much you're spending and cutting that down as much as you can. I love it. And you had some cheerleaders along the way, of course, family, giving you the CDs saying, listen to this. Anyone else that was a part of the journey? That was pretty much it. My sister, they actually paid off all of theirs about two years ago. So we came and celebrated with them a couple years ago.

1:52:15That little extra fire under you. Like, all right, we're next. Yeah. Buckle up. Wow, that's great. So how do you explain the feeling to someone of being completely debt free? Yeah, it's hard to explain. I don't even know. Like, it just feels like freedom. You almost wonder what to do with your money the next month. It's an odd feeling. Yeah. That's a good problem to have. Yeah, what did you do with it the next month? we still save it yeah we still save it we're we're hoping to invest in some real estate here pretty soon i love that maybe a little bit going towards the kids one day i see some off to the side yeah getting antsy you want to bring them up yeah okay let's get their names and ages as they come up on stage with you was that a big why for you guys having the kiddos along the way because are any of them like they weren't even born yet when you guys started the journey it looks like Yeah, this is Elliot.

1:53:03She is five. Cooper is two. And then we have an eight-month-old walking around somewhere with an aunt. That's fun. But, yeah, actually none of them were born when we started. Wow. So a lot of life happened along the way. A lot of life happened. It may have slowed down in seasons here and there, but you guys had your eye on the prize. Yes. Fabulous. Oh, beautiful. So beautiful. Oh, my gosh. We got tired. All right, we'll make it quick, buddy. I'm sorry. I'm sorry. Oh, it's okay. Let's get to it. Here it is. We've got Brian and Tara from Clarksville, Tennessee. $411 ,000 paid off in eight years and seven months, making$70 ,000 to$250 ,000.

1:53:43House and everything paid off. Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free! An actual debt-free scream. I'm going to count the crying as a cry for joy. That's what I'm saying, an actual debt-free scream. Oh, my goodness. I love it. We're screaming for all kinds of things. He's probably screaming for some, I don't know, milk right now. He's hungry. Oh, my goodness. That's exciting. That is exciting. Whenever someone pays off their mortgage. Ooh. Especially when they have so much time on their side. Oh, gosh. They're not even close to retirement. They're going to be bajillionaires.

1:54:18Like, think about it, how much wealth they can build just investing that mortgage payment every month. Yeah, that's right. You know, two grand from 40 to 65 with compound growth. You're like, well, that's an extra couple million right there. Yeah. These are people who understood that if you just decide the time is going to pass anyway, and you can just build little by little, and you look up, and you're exactly where you want it to be. But it takes time. Yeah. And he's so right. You see that big mortgage balance, and you're like, well, we can't pay it off early. It's$300 ,000. What's the point?

1:54:47We'll just make the minimum payment. We're going to move eventually anyways. Who cares? That's just so passive. That's normal in America. And instead, he went, you know what? We're going to knock out a little bit and a little bit, and soon it's going to be$250 ,000. and next thing you know, it's 200. And now it's 150. Now we're under a hundred thousand or like, we can see the finish line. And it's so funny because people are afraid of the sacrifice, but I look at them and I'm like, they're intact. Their clothes don't have holes in it. Like they look like they eat just fine. You know what I mean?

1:55:14Like they're here and they're fine. And so everybody who's afraid of the struggle or afraid of the timeline, man, just embrace it. It's going to happen. And you'll look up and you could be just like them. We have villainized sacrifice in today's world? You know, George, you said it and I got to go on that because it's so true. And I think the world, you know, the way the world is, it has set us up to not embrace the things that take boredom, patience, sacrifice. You know, our brains, they just want everything right now. And that's not the way money works. Everything we teach requires boredom, patience, and sacrifice.

1:55:51If you can learn to be a crockpot in a world full of microwaves, you're going to build so much wealth and be the weirdest person on the planet. And people will go, must be nice. Well, they must have got lucky. Must have had an inheritance. I went, yeah, they worked their butts off to get some luck. Maybe you should too.

1:56:26you

1:56:58Hey guys, Dave Ramsey here. to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:57:20Our scripture of the day, Joshua 1.9. Have I not commanded you? Be strong and courageous. Do not be afraid. Do not be discouraged. For the Lord your God will be with you wherever you go. Amen. Ayn Rand said, the question isn't who is going to let me, it's who is going to stop me. Ooh. Them fighting words. You got to say it with your chest. Jay just bowed up a little bit. All right. Dwayne is in Jacksonville, Florida up next. What's going on, Dwayne? Hi. Thank you. Sure. How can we help? All right. So I'm wondering how much to spend on a replacement for my wife's car. So she right now has a SUV.

1:58:00We need a little more room next year, three kids, carpool. So we're looking to trade up for a minivan. So this one I could probably get$5 ,000,$6 ,000, maybe$7 ,000. And I'm looking for probably a good quality minivan that'll last a while, basically. So trying to figure out how much to spend. Cool. What do you guys make a year? um about 55 after taxes all right and what other vehicles do you have so um i have a used acura and uh i just sold my nissan for that okay so you got the used acura plus this suv right now what is the used acura worth 17 and a half okay and you guys have any debt No, just for the house.

1:58:49Awesome. That's good. How much do you have saved for the car so far that's outside of your emergency fund? So I basically have like$85 ,000 or so in investments. A fair amount of that is set aside for upcoming construction on a house. But I'm feeling like we could push that off a little and take a little more of that for a car if that makes sense. What kind of investments is it in? Is it just in a brokerage account? wrong to be conservative in uh what's it called um um with an investing company i forget the name um it's just but it's just a normal taxable brokerage account it's not anything for retirement right there is a rough IRA in there too okay but a lot but you wouldn't touch that to use for any of these goals construction or the car definitely not okay how much do you want to spend on this thing?

1:59:39I'm thinking around 15, but I'm wondering if it might make sense to go a little better and get something that'll be a little more reliable for a longer time without spending too much on maintenance. Okay. Well, I'll give you the parameters. Number one, you've done it the right way so far. You're debt-free. You've got an emergency fund. You're going to pay cash for this thing. And the other parameter is that you don't want anything with wheels and motors to add up to more than half your annual income. So take your gross household income. What does that add up to? Is it closer to 70, 75? Well, my parents are actually really nice and still help out with me very willingly.

2:00:12So I don't really have to feel too much pressure to earn more quickly. I have more of a long-term plan with earning more with the job trajectory that I've taken. Okay. What's your current household income though? You said 55 is the take home. What's the gross? 68. Okay. So if we take, you know, you're 68, right? And where you divide that by two, that means the max for all the cars in your life is$34 ,000. You own an Acura that's worth$17 ,000, so let's take that out. That leaves you with$17 ,000 to spend on the car. That would be kind of my top limit for the car is that$17 ,000. I'd be very comfortable with that if you guys have the cash and you want to buy a$17 ,000 used minivan.

2:00:49I think you can get a great one. And if you focus on reliable makes and models in years, do your research and go, all right, we're going to get a, I don't know, I'm making this up, a 2016 Toyota Sienna. Yeah, something like that. That, you know, so just kind of start to figure out what's in the range, figure out when the biggest repairs happen and what they are and how much they'll cost. And then you'll kind of go into it knowing what you're getting into. Get a pre-purchase inspection on whatever car you get so that you don't have to wonder if it's going to have issues later on down the road. And I would think you're going to be in great shape.

2:01:23All right. Thank you very much. Congratulations. I can't believe I got to give someone good news today, Jay. Yeah, I love that. So there we go. Let's get to Victoria before we wrap here. Newark, New Jersey. What's going on, Victoria? Hi, thank you so much for having me. Sure. So essentially, me and my husband are looking to start a family, but we're feeling kind of like it's not going to be possible anytime soon with the financial situation. Not that our financial situation is bad. We just would preferably like me to be a stay-at-home mother. So going to one income feels tight. Right. Okay. Yeah.

2:01:59Tell us the situation. Do you guys have any debt? We do. We have a mortgage and a car loan. The car loan is about$25 ,000 and the mortgage is about$500 ,000. Okay. And then what do you both bring home every month? My husband brings in about$165 ,000 for the year, so about$8 ,000 gross for the month. and I'm bringing in$90 ,000 a year, so just a little bit over$4 ,000 net for the month. Got it. So the question is, would you be able to just live off the$8 ,000 and maintain the lifestyle that you have? Right. I'm leaning towards no because we're essentially saving all of my income. So without my income, we would have no savings.

2:02:48We do have a good amount saved and we do have a lot of equity in the house. So we're not opposed to, you know, relocating, but the Northeast is just so expensive. We're concerned that relocating won't even do it for us. What's the mortgage payment every month? With taxes, we're looking at about$5 ,000 a month. Oh, there's your issue. There's your issue right there, my friend. Now, you said he takes home$8 ,000. That feels too low. If he makes$165 ,000 gross. um well after you know 401k contribution benefits he's walking away with eight okay is he investing 15 right now do you know the amount he's only investing about half like eight percent that it just doesn't track i know taxes in new jersey can't be that high because he's walking away with less than 100 000 out of 165 yeah um somehow we still owe taxes every single year as well.

2:03:44So I really don't, you know, I see the paycheck that comes into our joint account, and it's pretty much$4 ,000 even. You guys got to take a look at that tonight and just say, hey, let's see where this money is going, because to George is exactly right. I'd be looking at that and saying, are we investing in an HSA? Are we investing in like, how many different places are we putting investments? How much are we paying for health insurance out of this? Is there anything else coming out of this that we don't realize? Is the withholding right on? All of those things I'd take a steeper look at. A little magnifying glass to that.

2:04:17And then what's the car payment? Okay. The car payment's about$500 a month. Okay. Well, I think there's going to be sacrifices made here either way. If you definitely, like you're like, I'm going to be a stay-at-home mom, then it's going to look like downsizing, not doing anything fancy, and selling this car. okay do you guys have enough in savings to just pay off the car today uh we do we have about 120 000 in cash and saving great what are you saving that for um we don't know so that's also my next question like what can we be investing in can we get into real estate should we just throw everything into the stock market like how can we start making some passive income on this to kind of make the situation better.

2:05:02Here's what you do. This next house you buy and downsize, you'll use that money to then lower your mortgage payment to where it's two grand a month and you get to be a stay-at-home mom. So I would not go like, you have 19 goals right now. I want to be a real estate guru and be a stay-at-home mom. And I want to invest in the stock market. I would focus on the one thing that you said you want to do, just stay at home. So I would pay off the car today if you love the car. It's not too much of your income, but we got to free up that 500 bucks a month so we can breathe when you become a state-owned mom.

2:05:32And so it's sort of pre-planning for this new life and then live on his income for a month. See how it feels. Put your income completely aside and go, what would life be like if we had to live just on this? And when you relocate, it's going to make it a whole lot easier to go from five grand to 2 ,500 even. Right. So that's the thing to solve for is how do we get our mortgage or rent to be closer to two grand out of this eight so that we have enough to still live our life, to still invest, to still go on trips, to still save for our kids' college, to still knock out the mortgage early. And that's going to mean a different lifestyle than you guys are leading right now.

2:06:09But I think it's a worthy and noble goal. And I would definitely do it if I was in your shoes. We definitely want to. Awesome. Well, once you sell the house, you get some equity, use whatever's left, you know, that 75 or 100K, put it down on that next one, and you get that mortgage down to like 200 grand instead of 500 grand. Excellent. Now we're cooking. Now we can actually have a reasonable payment and you can stay at home forever and not be stretched thin. It's a great goal to have and it's a great reason to do the baby steps. It's always found in the mortgage. The answers always lie in the mortgage parents.

2:06:43That'll get you. That'll get you. Wow. Well, that puts this hour of the show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.